The author is a Forbes contributor. The opinions expressed are those of the writer.

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Apple has been a laggard of sorts in the mobile advertising space. Despite being one of the most influential players in the mobile industry, the company’s iAds platform – which allows developers to embed advertisements into iPhone, iPod and iPad applications – accounts for just 2.5% of U.S. mobile advertising revenues, according to eMarketer. This is a far cry from the 50% initial market share that the company set out to garner when it launched the service back in 2010.However, has been looking to revamp the iAd platform by quietly unveiling a series of deals and initiatives aimed at making it more accessible and effective for marketers. In this note, we take a look at how the mobile advertising space is shaping up and what Apple is doing to make a dent in this fast growing market.

We have a $120 price estimate for Apple, which translates to a market cap of about $690 billion. Our price estimate is about 10% ahead of the current market price.

Why The Mobile Advertising Market Is Attractive For Apple

Although the mobile advertising business seems an odd fit for Apple, given its hardware-driven business model, it could prove reasonably lucrative over the long run owing to its strong margins and growth prospects. The mobile advertising market has seen growth surge over the past few years, driven by growing smartphone adoption and an increasing shift of advertising budgets from traditional media onto mobile and online channels. According to eMarketer, mobile advertising (which includes smartphones and tablets) is expected to soar by around 83% this year to $18 billion in the United States, surpassing other forms of media including newspapers ($17 billion) and radio ($15.5 billion). There remains significant potential for further growth, since mobile is projected to account for just about 9.8% of the total ad market this year, despite the fact that American adults, on average, spend close to 25% of their media viewing time on mobile devices. In contrast, Americans spend about 40% of their media viewing time on TV, and TV accounts for close to 40% of total advertising spending.This could indicate that the medium is significantly under-monetized at the moment.

Mobile advertising has been a crucial growth lever for most internet companies. For instance, Facebook now derives close to 66% of its total advertising revenue from mobile ads and its mobile ad revenue grew 114% year-over-year during its most recent quarter. Google and Facebook accounted for about 38.6% and 14.7% revenue share, respectively, in the U.S. mobile advertising market during 2013. Although it may not be fair to compare Apple’s advertising platform to those of and Facebook, given that iAd is specific to iOS devices, it is certain that Apple has a lot of room for improvement considering its scale and its affluent user base. Apple is on track to sell a billion iOS devices and we estimate that there are over 500 million iOS devices currently in use. Additionally, Apple’s user base presents an ideal platform to build a mobile advertising business. According to U.S. mobile app report, iPhone users have a median income that is as much as 40% higher compared to Android users. iPhone users are also more engaged with their smartphones, spending more time on mobile applications compared to users of other mobile platforms.

Making iAd More Accessible

Mobile ads typically have low entry costs, making them accessible to small businesses and vendors who often spend just a couple of hundred or thousand dollars on campaigns. However, when Apple launched iAd in 2010, it set the minimum spend for campaigns at $1 million, which limited the platform to big-name brands and large companies. However, Apple has steadily reduced the minimum spend and marketers can now buy ads for as little as $50. The company has also opened up the iAd platform to a broader audience by allowing anyone with an Apple ID to create a campaign using the iAd Workbench tool. Apple also recently improved iAds international reach and the platform is now available in over 100 countries. The company has also made the platform more appealing to applications developers, offering them 70% of revenue share from the service.

Previously, advertisers who wanted to use the iAd platform had to buy inventory via Apple's proprietary interface. However, last month, the company introduced support for programmatic buying on iAds, meaning that advertisers will be able to buy iAd inventory in an automated fashion through leading demand-side platforms and ad tech companies including MediaMath, The Trade Desk, Rubicon Project and GET IT Mobile. This would allow buyers of digital advertising inventory to buy and manage ads and retrieve analytics data directly through their own systems. The move would open up iAd to a larger audience, since these demand-side platforms allow marketers to buy and manage ads from a large set of sellers and publishers in a single interface. This could potentially make it easier for iAds to integrate into a larger advertising campaign involving multiple different platforms and channels.